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Portable MP3 Player

Flow of Presentation
Market Consumer

Target Segment
Indian Consumer Durable Market • Demographics
• Size • Usage
• Trends
• Dispersion Brand
• Brand Recall
• Perception
• Choice of Brand
Category: Portable Music Player
• Size
Brand Purchase
• Trends • Influencers
• Dispersion • Purchase Location

Conclusions
Section I: THE MARKET
Structure of Indian Consumer Market
Consumer Durable Market in India

Size of Consumer Durable Market in Y-o-Y Growth of Consumer


Chart Title
India (` Bn.) Durables in India (%-age)
300
10
9.5 9.5
250 9 9
8.5
8 8
7.5
200 7
6
150
5
100
4
3
50 2
1
0
2006 2007 2008 2009 2010 2011 2012
0
2006 2007 2008 2009 2010 2011 2012

*Source: Group compilation from sources


http://www.expresscomputeronline.com/20080121/market02.shtml, http://www.pcb007.com/pages/zone.cgi?a=15755,
http://info.shine.com/Industry-Information/Consumer-Durables/902.aspx
Category-wise Dispersion (2009)
3%
10% 27%

15%

15%
30%

TV Other Consumer Elec Refrigerator AC Washing Machine Kitcken


Contribution Within Subcategory (2009)

*Source: Group compilation from sources, , http://www.scribd.com/doc/24934409/Changing-Consumer-Durables-Industry-in-India


Ownership of consumer durables by
households

90.00%

80.00%

70.00%

60.00%

50.00%
Urban India
Rural India
40.00%

30.00%

20.00%

10.00%

0.00%
Air Conditioners Computer @ Home TV Music Devices
Trends in Sales: Portable MP3 player
Number of Units Sold: India Y-o-Y Growth in Units Sold(%-age)
14000 90
80
85 Title
Chart
12000
75 77
10000
70
65 69
60
8000 50
40
6000
30
4000 20
2000 10
0
0 2006 2007 2008 2009 2010 2011
2006 2007 2008 2009 2010 2011

•Average price of portable MP3 players in India in 2009 is Rs. 1100 per unit
•GAGRunits: 103%
•Highly competitive market with approximately 100 different brands available including
3-4 leading brands, 15 brands that are well known names of electronics and consumer
electronics industry and other local and cheap Asian imports.

*Source: Group compilation from sources http://www.indiahousing.com/mp3-players-india.html,


http://www.scribd.com/doc/24934409/Changing-Consumer-Durables-Industry-in-India
Market in Developed Countries
• The market in 2010 till September has shown
a decline of 12% in unit sales, 7% decline in
sales revenue
• Only segment with a slight boom was touch
screen mp4 players

Source: GfK Retail and Technology Global Report, September 1, 2010


Brand-wise Dispersion
Apple Sony
Phillips Panasonic
9%
Cheap South-Asian Imports Other
13%
33%

9%

29% 7%

•Sony dominates the market owing to the brand equity created by Sony Walkman®
(portable cassette player) followed by Apple and Philips.
•Apple and Sony are the dominant players in Tire1 cities, Sony and Phillips dominates in
Tire 2 cities while Tire 3 and Tire 4 cities are more dominated by various cheaper brands.

*Source: Group compilation from sources www.pluggd.in/apple-ipad-price-in-india-297, www.apple.com/in/pr/library/2010/03/05ipad.html


Key Points
•The Indian economy is growing by 8% (approx), with the increase in disposable
income and positive growth in upper-class, upper middleclass and middleclass pose
serious opportunity for consumer durables.

•The sale of consumer durables have reported an average 8.5% growth through out last
4 years with a CAGRvalue of sales as 7%.

•The Category ‘Portable MP3’ player is a highly fragmented market with nearly 100
different brands available with top 5 brands having 38% of market share.
Section II: THE CONSUMER
Consumer Demographics
Based on Age Group
Age Group
7% 3% 2% 12%

•The majority of MP3 Player buyer is of the


age group 18-40 years, middleclass or upper
middleclass, from tire 1, tire 2 cities.
76%

<13 13-18 18-40 40-50 >50

*Source: Group compilation from sources www.marketresearch.com/product/display.asp?productid=1375090, www.epinions.com /Electronics


Ownership of Popular Physical
Assets/Durables at Urban Household Level
120
100
80
60
40
20
0 Colour TV Microwave Mobile Computer Laptop Music System Portable mp3 VCD/DVD
Player Player

All Urban Households Sec A Sec B


Sec C Sec D Sec E

*Source: JUXT, Indian Urbanites 2009 Study


Motivation Behind Use of Electronic
Gadgets
40
35
30
25
Sec-A
20 Sec-B
15 Sec-C
10 Sec-D
Sec-E
5
0
Gadgets for Simple to Gadget reak Looks and Style Keep my life Not Fall Behind
Performance operate and Use simpler

*Source: JUXT, Indian Urbanites 2009 Study


Hobbies and Interest: Urban
120

100

80
Music
60 Reading Boks
Films
40 Computer Games

20

0
Sec-A Sec-B Sec-C Sec-D Sec-E

*Source: Marketing Whitebook


Frequency of Listening to Music
60
Total Listening to Music 60 Use of MP3 Players as a Music Player

50 50

40 40

30
30

20
20

10
10

0
1hr-2hr 1hr-5hr <1hr
0
100% >50% 20%-50% <20% 0% never
(always) (mostly) (sometimes) (rarely)

Though the average price of Portable MP3 player is presently `1000, its not
perceived as an utilitarian product
*Source: Primary Research
Usage of Portable MP3 player
60 Place of Use Sharing of MP3 Player
80
50 70
40 60
30 50
40
20
30
10 20
0 10
0
yes no

High degree of personal involvement associated with the product

*Source: Primary Research


Attributes of Importance in Choosing a
Brand
Color
Size
Added features
Price
Memory
Brand name
Warranty
Availability
Looks
Service centers
Sound

0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5


Scale of 1-5, 1 being least important and 5 as most important

*Source: Primary Research High involvement product, ego-


centric
Unaided Brand Recall
Writex

Trancend

Western Digital

Phillips

Panasonic

Sony

Apple

0 20 40 60 80 100 120

•Apple enjoyed a 100% top of the mind recall

*Source: Primary Research


Brand Perception
  Apple Sony Panasonic Phillips Transcend Western
Digital
High Quality 4 4 1     1
High Style 4 3     1  
High Performance 3 2 2 1    
High Sound 4 3 2 1 1  
Quality
High After sales 2 2 1      
service
High Price 4 3       1
Other            
 TOTAL 21 17 6 2 2 2

Apple® and Sony® receiving the highest association weight-age and highest
brand recall (unaided) again goes on to establish the fact that this category is
considered above utilitarian
Purchase: Influencers
3.5
Influencers in Buying
3

2.5

1.5

0.5

0
Friends/Peer Son/Daughter/Brother (Other) Salesman at shop Mother/Female head Father/Male head

Establishes the high dominance of young generation/youth in the purchase of the


category
*Source: Primary Research
Point of Purchase
60 Accompanied By 60 Point of Purchase 80 Motive of Purchase
70
50 50
60
40
40
50
30
30 40
20
30
20
10 20
10
0 10
Shopping Exclusive Electronic
0 Mall Outlets Retails 0
Friends Father Alone Exclusively Shopping
Session

•Well thought and planned purchase, preference of modern trends and influenced
by peer

*Source: Primary Research


Conclusion
•Product associated with ego and ‘feel good’ factor rather than mundane or
utilitarian need
•High involvement of young generation in purchase and purchase decision
•Preferred segment is of young and from middleclass to upper middleclass
background, from Tire1 or Tire2 cities
•With the growth of economy Tire3 cities are also opening up as probable
customer base
•Quality and looks being the highly rated attributes in the choice of brand, a certain
premium may be charged on price especially in the tire1 and tire2 cities
•In order to cater to tire3 cities cheaper variants with high design features is a must
to beat the competition of cheap Asian imports
•Marketers Take: Go for High Value mp3 Player with look, style & Design
Attributes.

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